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Analytics for Utilities: Deriving customer satisfaction and better profits from Big Data

Analytics for Utilities: Deriving customer satisfaction and better profits from Big Data

As smart meters are rolled out in more and more households
and businesses in different countries, there has been an explosion in the
volume of data that’s being generated in the utilities sector and businesses
and consumers alike can benefit from this. OpenGov had a conversation with Mr. Niall
Gallacher, Director, Industry Solutions – Communications, Energy and Utilities at Qlik, a leader in the data analytics
market, to learn how utilities can derive the maximum potential benefits from
this deluge of data.

Traditionally, it has always been a challenge to deal with exponentially
rising volumes of data. But with the exponential rise in computing power, the
ability of technology now to cope with the volume has improved. At the same
time, millennials coming into the workforce are adept at using apps to find
data and information instantaneously, and they don’t expect any less from the
companies they join.

These two factors, from the technology and the people perspective
is what is affecting the way utilities companies can transform their
businesses.

Mr. Gallacher
explained, “Instead of purely having data pointing backwards at what might have
happened in the past, they are using data to start helping predict the future,
to drive digital transformation and identify what might happen in the future.
We see organisations moving from a focus on historical performance to key
performance predictors about what might happen in the future. This is about the
ability to discover and simulate, rather than purely slicing and dicing numbers.”

Looking forward to
smart meters

It all starts with data collection, and smart meters are a win-win
for both businesses and consumers. Let’s start with energy retailers. As they
sign up for contracts to buy energy, they have to estimate energy consumption
for their customer base to ensure that they buy a sufficient amount to support
their needs. Before smart meters, it was challenging to predict exactly how
much energy consumers were going to use. If the energy retailer didn’t procure
sufficient energy they might end up with brownouts (drop in voltage in an
electrical power supply system) or even a major blackout (power outage).

So, retailers ended up buying more energy than they need.
Going upstream, this also meant that most electricity generators are often
generating more electricity than what would be used. It was costly, wasteful
and damaging from an environmental perspective.

With smart metering data coming in every 5-15 minutes,
retailers can now be significantly more accurate in their ability to forecast usage.
They no longer have to over-invest and buy additional energy. Similarly, generators
don’t have to over-generate to the same extent.

On a macro-level, if the generators could cut the amount of
over generated energy by even a few percentage points over a year, this can
lead to vast savings and the analytics involved generates immediate business
value. As organisations get better and more adept at predicting the amount of
energy they need to generate for the retailers, the fossil fuel footprint of
the power stations can also be diminished. 

How analytics is
powering the utilities industry, today

Niall shared the example of how in the UK, the government
aims to have smart meters installed in a majority of households by 2020. To
encourage this, companies like British Gas
(Centrica Plc) are taking the lead. British Gas is UK's leading energy
supplier, serving around 11 million homes. They now offer a HomeEnergy FreeTime
tariff which provides consumers with free electricity every
Saturday or Sunday if they install a smart meter and keep their
consumption within certain thresholds for specific periods.

From a business perspective, British Gas benefits from the
ability to view usage trends more regularly. Customers too benefit from the transparency.
British Gas’ line of Hive smart
home products
enables consumers to better control their energy usage. 

Through their smartphone, consumers can not only access their electricity usage
and bills, but they can also remotely switch on or switch off high energy
consuming devices such as air-conditioning units or heating systems.
 

Hive products also allow remote control over
light bulbs and sockets. Through Hive, consumers can get a close to real-time
picture of their consumption from the smart meters and change their consumption
habits.

Niall provided a
behind-the-scenes account of how British Gas is now reaping these benefits. British
Gas Smart Metering (BGSM) was set up in 2010 to roll out smart meters with the
goal to install 16 million smart meters by 2020. To do this, it invested in
business intelligence and data management technologies, including from Qlik.

Initially, BGSM’s
data analysis and management information functions were spread across a variety
of inherited systems generating “multiple versions of the truth”. British Gas
managers were finding that service levels were not matching up to standards and
promises were not being met. To counter this, BGSM decided to go for data
consolidation. After three months' proof of concept, it chose Qlik for
self-service analysis on top of a Hadoop “data lake”. At the time, the data
lake contained more than nine billion records and took in data from sources
including over 150 SAP tables.

On average, the Qlik
dashboards processed files with more than four billion records and fetched
about 45 million records each day. The management team could not only access
business information, but could also drill into it. This single version of the
truth made collaboration easier and it also made it easier to spot “what the
company isn’t doing well and what it can change”. 

Benefitting from
Qlik’s associative technology

Qlik’s data analytics platform also has the ability to help
organisations that have the problem of persistent data silos – this may occur
when each department or office has its own business systems and each business
system generates its own report. Mr. Gallacher said, “Instead of joining all
that data together, we can streamline the modelling, and start associating. Our
Associative
Engine
allows for that simplification.”

The Qlik Associative Engine combines large numbers of data
sources and indexes them to find the possible associations, without leaving any
data behind. It offers powerful on-the-fly calculation and aggregation that
instantly updates the analysis and highlights associations in the data,
exposing both related and unrelated values after each click. This means users
are free to search, explore, and pivot based on what they see, without
limitations and without having to go back to data analytics teams and wait. 

Power in the hands of
the users

Mr. Gallacher shared the example of Horizon Power, a
State Government-owned power company responsible for generating, distributing
and retailing electricity in Western Australia. It provides power to about
100,000 residents and 10,000 businesses across regional and remote Western
Australia.  

Horizon Power buys power from independent power providers
and provides it to customers. With such a huge customer base, the company
generates a significant amount of data both internally and externally.

The company originally used a dedicated analytics team with
reports being sourced from the IT department. It often took weeks to generate a
report, which would then require additional edits from the business team.
Horizon Power’s first phase of Qlik implementation was designed to visualise
corporate KPIs and targets and contractor reports to ensure accountability from
external parties.

As a direct result of the deployment, they saw a 45 percent
cost reduction in report production and 60 percent reduction in delivery time.
Data is aggregated into a single, accessible platform to ensure users can see
the whole story in their data and make better strategic decisions. Horizon Power
can now create much of their reporting in near real-time since data
digitisation that used to take weeks to complete now takes only hours. Users can
leverage multiple data streams, many of which are derived from Horizon’s ERP
system. They are able to correct data inaccuracies or address issues in
real-time, often without the need for IT intervention.

Mr. Gallacher said
that at its heart, that’s what Qlik is all about, enabling people to
make better business decisions to start driving profitability and improved
competitiveness.